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Company Profit and Loss Sea Ltd - Leaving Cert Accounting - Question 3 - 2005
Question 3
Company Profit and Loss Sea Ltd. has an Authorised Capital of 900,000 Ordinary Shares at €1 each and 500,000 4% Preference Shares at €1 each. The company has alread... show full transcript
Worked Solution & Example Answer:Company Profit and Loss Sea Ltd - Leaving Cert Accounting - Question 3 - 2005
Step 1
Show the Profit and Loss Account for the year ended 31/12/2004.
Answer
Profit and Loss Account of Sea Ltd for the year ended 31/12/2004
| Description | Amount (€) |
|---|---|
| Net Profit for year | 250,000 |
| Less: Taxation | (11,000) |
| Profit after taxation | 239,000 |
| Less: Appropriations | |
| General Reserve | 50,000 |
| Interim Ordinary Dividend 9c | 63,000 |
| Interim Preference Dividend for half year | 8,000 |
| Proposed Preference Dividends | (unknown) |
| Proposed Ordinary Dividend 13c | 91,000 |
| Retained profit for year | 19,000 |
| Retained Profit 1/1/2004 | 225,000 |
| Retained Profits carried forward | 244,000 |
Step 2
Prepare a Balance Sheet showing the relevant accounts after making the above adjustments.
Answer
Balance Sheet Extract as at 31/12/2004
| Description | Amount (€) |
|---|---|
| Current Assets | |
| Creditors: amount falling due within 1 year | |
| Preference Dividend due | 8,000 |
| Ordinary Dividend due | 91,000 |
| Taxation | 11,000 |
| Fixed Assets | |
| Capital and reserves | |
| Authorised Capital | |
| Ordinary Shares of €1 each | 900,000 |
| 4% Preference Shares of €1 each | 400,000 |
| General Reserve | 390,000 |
| Retained Profits Balance | 244,000 |
| Shareholders Funds | 1,734,000 |